Financial Times
Monday Jul 14 2003. <
br> By Tony Barber in Rome
Published: July 14 2003 18:23 | Last Updated: July 14 2003 18:23

Alitalia may buy stake in Meridiana

Alitalia's board of directors is to discuss the possibility of acquiring a partial or controlling stake in Meridiana, the Sardinia-based airline owned by the Aga Khan, at a board meeting on Tuesday.

Industry sources said Alitalia was interested in Meridiana because it would add 16 percentage points to the flag carrier's current 55 per cent share of the domestic market. However, they said it was not certain that the Alitalia board would take a final decision at the meeting on Tuesday.

In an interview with Les Echos, Francesco Mengozzi, chief executive of Alitalia, said the state-owned airline was still looking for an agreement with Meridiana.

"It doesn't necessarily mean an acquisition," he said.

"The kind of tie-up between Air One and Lufthansa could be a source of inspiration for us."

The German flag carrier operates a code-share deal with the Italian regional airline.

Alitalia already has a limited code share with Meridiana, selling seats on each other's flights on seven routes.

The Aga Khan controls about 20 per cent of Meridiana directly and another 60 per cent through two holding companies, with the bulk of the remainder held by the airline's 1,400 employees.

Some industry experts estimate Meridiana's total value at 150m ($169m). It has a fleet of 21 aircraft and carried 3.3m passengers last year with a turnover of more than 360m.

The Aga Khan established Meridiana in 1963 with the aim of encouraging tourism on the Costa Smeralda, Sardinia's upmarket coastal area.

The airline was known as Alisarda at that time, but changed its name to Meridiana in 1991 as it expanded its services throughout Italy and into other parts of western Europe. Additional reporting by Pierre de Gasquet